The U.S. is not yet embroiled in a full-scale trade war, but the first shots have been fired by both sides. And American companies, as well as the U.S. operations of foreign firms, are bracing for the pain.

Electrolux, Europe’s largest home appliance maker, has shelved a $250 million expansion of a plant in Tennessee. American automakers are forecasting rising prices. The maker of Jack Daniels is warning analysts of a potential hit to earnings.

President Trump on Thursday signed proclamations for a 25% tariff on steel imports and 10% on aluminum imports. He said Canada and Mexico won't be subject to the duties if the two countries and the U.S. can renegotiate the North American Free Trade Agreement.

The European Union has said it will retaliate by slapping tariffs on products such as bourbon, peanut butter, cranberries, orange juice, motorcycles and jeans.

Meanwhile, the White House is considering separate tariffs on China for intellectual property theft that could raise clothing prices for American consumers and threaten U.S. jobs.

The last time a trade war happened in the U.S., things didn't go well for the economy. Will history repeat itself as Trump puts a tariff on steel and aluminum? Here are the facts.
Just the FAQs

The impact of the conflicts on the U.S. economy is expected to be modest under the most likely scenario — trading partners most affected by the steel and aluminum duties responding in kind. Over the next 18 to 24 months, the U.S. economy would be trimmed by 0.12 percentage point and the country would have 190,000 fewer jobs, according to Moody’s Analytics.

The effect would be subdued because other countries are likely to impose only measured tariffs that roughly equal the value of their exports to the U.S. that have been affected, says Gary Hufbauer, senior fellow at the Peterson Institute for International Economics.

But if the trade skirmishes cause NAFTA negotiations with Canada and Mexico to break down and the conflict spreads, it could bust out into a historic trade war that costs the U.S. economy nearly 4 million jobs, Moody’s says. The seventh round of North American Free Trade Agreement negotiations has wrapped up in Mexico City with only limited progress.

“Once the U.S. raises tariffs, we are going down the rabbit hole, and it is anyone’s guess how this plays out and how much economic damage it will do,” says Moody’s Chief Economist Mark Zandi.

The 25% steel tariff by the U.S. could push up the price of the imported material so sharply that it “could damage the overall competitiveness of (Electrolux’s) operations in the U.S.,” the company told Reuters.

Paul Varga, CEO of Brown-Foreman, which owns Jack Daniels, said in an earnings call Wednesday that the company could become an “unfortunate and unintended victim” of the tariffs if the iconic whiskey brand’s overseas sales are damped by European duties.

Car prices may rise

Hyundai spokesman Jim Trainor says U.S. steel and aluminum tariffs and potential retaliatory duties by other countries could “negatively impact our current U.S. production” by raising costs and leading to higher prices. The company has a plant in Montgomery, Ala., that employs 2,500.

Autotrader analyst Michelle Krebs estimated the proposed tariffs would add about $200 to the price of an average car. While that may not sound like much, she noted interest rates on car loans are already headed up, forcing many middle-income Americans to opt for used cars at a time when sales of new cars are already under pressure.

About half the increased expense of steel and aluminum would be absorbed by automakers rather than consumers, leading to lower profits, predicts Barclays auto analyst Brian Johnson. The auto industry accounts for about a fourth of the steel used in the U.S. If the tariffs take effect, Ford and General Motors would face increased costs of about $260 million and $215 million annually, according to Barclays.

Sergio Marchionne, CEO of Italian-American automaker Fiat Chrysler Automobiles, which would face similar challenges, urged restraint to prevent a trade war between the U.S. and Europe.

"I’m suggesting that we stop playing tit for tat, that we get our blood pressure to go back down to normal and we sit down at the table and find a way to resolve this issue. I don’t think we have to escalate this into a full-blown trade war," Marchionne said at the Geneva Motor Show, according to CNBC.

Marchionne's comments came several days after Trump, via Twitter, threatened a tax on European cars if the European Union takes retaliatory action.

Aerospace companies are also nervous.

“America’s aerospace and defense industry is deeply concerned that the anticipated tariffs on aluminum and steel will raise costs and disrupt the supply chain, putting U.S. global competitiveness at risk,” the Aerospace Industries Association, the voice of the U.S. aerospace sector, said in a statement this week.

Last week, AIA President and CEO Eric Fanning told CNBC: “This is going to impact companies big and small in the aerospace and defense world. More importantly, we’re concerned about retaliation. The aerospace and defense industry generates the largest net (trade) surplus in the manufacturing sector – over $86 billion a year. These companies thrive on the exports of their products.”

Farmers threatened by job losses

Iowa farmers, meanwhile, worry that Canada, Mexico and China will slap tariffs on their corn, soybeans, pork and beef. The entire Iowa congressional delegation wrote to the president Wednesday urging him to back off the steel and aluminum tariffs.

At a legislative breakfast over the weekend, Iowa Congressman Steve King, a Republican, told residents of his native northwest Iowa that he opposed Trump’s steel and aluminum tariffs because of what they could do the agricultural market.

“It will be the '80s all over again,” King said, referring to the 1980s farm crisis that put 10,000 Iowa farms out of operation.

Farmers and business leaders are already on edge about the president’s repeated threats to rip up NAFTA. Nearly half of Iowa’s exports — $5.6 billion worth — go to Canada and Mexico, according to the U.S. Chamber of Commerce. Iowa could shed up to 138,000 jobs if the trade agreement were terminated.

Besides triggering retaliation, the steel and aluminum tariffs could increase the prices farmers pay for equipment like tractors and combines, said Iowa Corn Growers Association President Mark Recker.

The U.S. beer industry is particularly alarmed by the tariff on imported aluminum because more than half of the beer produced annually is packaged in aluminum bottles or cans, according to the Beer Institute, the national trade association for the brewing industry. The tariff will cost beverage makers $347.7 million and eliminate more than 20,000 jobs.

“Aluminum is critical to the well-being of America’s beer industry,” Beer Institute president Jim McGreevy said in a statement. ““Imported aluminum used to make beer cans is not a threat to national security. … We urge the Department of Commerce to exclude imported aluminum … from these tariffs.”

Whether shoppers will see the cost of sweets or any other foods go up when they’re at the supermarket or picking up a snack at a convenience store is hard to know.

“Preliminary figures from just one of our food manufacturers indicates that the tariffs would add $50 million in annual sourcing costs for steel tinplate used in cans,” Grocery Manufacturers Association spokesman Roger Lowe said in an email. “Although companies will absorb some added costs limiting reinvestments and potential job creation, costs will have to be passed on increasing prices in the marketplace.”

It’s not just foods for humans that could get hit. Pete Tabor, vice president of regulatory and international affairs for the Pet Food Institute, the trade association for dog and cat food manufacturers, said he’s worried about both pet owners’ budgets and his members’ businesses.

“There are 180 million dogs and cats in households in the U.S. A lot are in fixed- or low-income households. If you increase the costs even a little bit, it will stress an already-stretched financial budget,” he said.

Amid the concern about steel, concerns are growing about a separate set of tariffs potentially being placed on goods from China in the wake of an investigation by the Trump administration into whether that country is stealing intellectual property from the U.S.

Retail industry experts and representatives say tariffs aimed, in particular, at the Chinese could result in higher prices for American shoppers, lower profits for American businesses, and the potential loss of jobs in an industry that is the nation’s second largest private employer.

“This would be a tax on every American,’’ says Stephen Lamar, executive vice president of the American Apparel & Footwear Association. “If you’re taxing imports coming in from China, our largest source of apparel and our largest source of footwear by far, you’d be raising prices on clothing and footwear for every ... American consumer.’’

Roughly 97% of the clothing and footwear sold in the U.S. is imported from abroad, and of those imports about 41% of apparel is brought in from China, while roughly 72% of shoes come from that country, Lamar says.

Based on that volume, a 25% tariff imposed on clothing and shoes would result in an American family of four having to spend roughly $400 more on clothing and shoes per year, he says.

Additionally, other countries, such as Vietnam — the second biggest source of clothing and shoes to the U.S. — might also raise its prices. And the domino effect would only spiral from there.

“What happens then is people buy less,’’ Lamar says. “And then you see the secondary effect. Shoe and clothing purchases that would have been made are not being made anymore. What does that do to the 4 million people employed because of the shoe and clothing industry?"